BAT’s price increases balance volume drops

April 30th, 2015 00:00

British American Tobacco PLC said income dropped 5.8% in the first quarter of 2015 as exchange rates run counter to it, but it took market share, grew volumes of it key growth cigarette brands, and said earnings would have increased 1.7% if exchange rates had stayed solid as price increases balanced general volume drops.

The cigarette maker said the growth in earnings at constant exchange rates in the 3 months to end-March was motivated by solid prices, especially price increases in markets with high inflation.

Its cigarette volume from branches fell into by 3.6% on the year to 152 billion as the industry at large observed volume drop, especially in Brazil, Russia and Vietnam. This balance a good volume performance in markets such as in South and Central Asia and Mexico, with the company's market share up by 40 basis points powered by South Korea, Mexico, Bangladesh, Japan, France and Poland.

Sales volumes of its five growth cigarette brands increased 5.7%, with Dunhill volume up 1.2% due to growth in Indonesia and Brasil, Kent volume down 1.6% as it declined in Russia, Japan and Romania, and Lucky Strike volume up 5.0% owing to jumps in Mexico, France and Belgium. Pall Mall volume went up 2.4%, powered by growth in Pakistan, Poland and Mexico, while Rothmans volumes raised 36.9% owing to a solid performance in markets such as Russia, Australia, Kazakhstan, Turkey and Italy.

BAT also said its Vype e-cigarette was developing strongly in the UK, offering a platform for its introduction elsewhere, while it stays on track to start its nicotine inhalation product certified as a medicine, Voke, in the UK later this year. It will also test market a tobacco heating product in 2015.